: The Montgomery County Psychosocial Alternatives to Hospitalization (MCPATH) study will examine the differential effectiveness of components of Montgomery County's continuum of services for persons in psychiatric crisis and attempt to determine what types of services will most quickly, economically, and durably reduce symptoms and promote return to pre-crisis levels of functioning for patients in severe enough psychiatric crisis to be deemed in need of hospitalization. The research will compare two types of non-hospital residential crisis care (group home and foster home) with inpatient treatment in psychiatric units of local general hospitals. The principal focus of the study is on the treatment episodes of patients randomly assigned to these three types of settings. Outcomes will be compared in terms of symptom reduction, psychosocial functioning, client and family satisfaction, readmissions, costs and benefits during the six-month study period. Four basic hypotheses will be tested: 1) symptom reduction (episode resolution) will be similar across all three types of residential care; 2) episode costs will be lower for the two alternative settings; 3) alternative treated patients will have better six-month outcomes in terms of readmissions, symptoms, psychosocial functioning, and satisfaction with treatment; and 4) six-month costs will be lower for alternative treated patients. Residential crisis intervention in community settings is strongly tied to State policy focused on diverting admissions from hospitals to more normalizing and less costly community based services. Results will provide concrete information with policy and programmatic implications for the implementation of residential alternatives as part of community crisis response system.